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Whale Week: The Value Investor

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Fast Money’s Whale Week continues with our celebration of capitalism and the central figures behind The Street. In stormy markets like these, sometimes it's best to follow the biggest whales, and there is no bigger investor than Warren Buffet.


Whale:
Warren Buffett
Species: Value Investor
Prey: Undervalued Companies

The corporate seas are filled will killer whales of all species. But the biggest and most majestic of them all is Warren Buffett. Dubbed the Oracle of Omaha - as head of Berkshire Hathaway (BRK), Buffett is one of the most patient species of whales: the value investor.



This whale doesn’t get frazzled by choppy seas; and you won’t see Buffet swim in the momentum waters either. Instead, his approach is surprisingly simple: He captures his prey for the long haul - buying undervalued companies with solid fundamentals and strong brands – a philosophy he learned under the tutelage of the great Professor Benjamin Graham.

His biggest kills include all out purchases such as General Re Insurance and Fruit of the Loom to big nibbles such as Coca Cola and Gillette.

Recently, this whale has acquired a taste for the railroad shares such as Burlington Northern. And it’s one that works: since just 1990, Buffet’s been swimming well ahead of the pack – nearly quadrupling the returns of the market in that time. Consequently, Buffett amassed a reported $52 billion personal fortune, making him the second richest man in the world.

But his wealth is matched only by his munificence – and he recently pledged $31 billion to the Gates Foundation – the largest charitable gift in history.

Warren Buffet: The biggest whale – with the biggest heart.

Eric Bolling explains that Warren Buffet puts out an annual investor letter. Eric calls it a great read.

Guy Adami says Warren Buffet looks for a company that meet 5 criteria. They are:

- $5 - $20 billion range
- consistent earnings power
- earning good returns on equity
- little or not debt
- simple businesses

Pete Najarian says Buffet also owns shares of Johnson and Johnson (JNJ) and Coke (KO), and investors should too.

> The Berkshire Hathaway Shareholder Letter

Symbol
Price
 
Change
%Change
JNJ
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KO
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Trader disclosure: On Aug 9 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Macke Owns (JWN), (INTC); Najarian Owns (GS), (AMSC); Bolling Owns (T), (BP), Gold, Silver; Bolling Owns Japanese Yen Futures